The National Energy Regulatory Authority (ANRE) moved to introduce a protection mechanism against the risk of sham contracting of electricity with no real intention to purchase, the institution announced on Wednesday.

'Energy is a strategic asset everyone has the right to enjoy at fair prices. Those who want to buy energy must also assume the financial responsibility of the contract. We want a healthy, fair, functional and above all, mature market, and this order paves the way to the market's maturation,' ANRE president George Niculescu said in a statement.

ANRE's Regulatory Committee adopted at its July 15 meeting a new order requiring electricity buyers to pay an advance or provide a minimum guarantee at the time of the signing of forward contracts as follows: 5% of the contract value - for deliveries with a duration of more than 6 months; 10% of the contract value - for deliveries of up to 6 months. The payment term is 15 days from signing.

The measure applies to standard contracts and does not affect bilateral EFET contracts.

According to the cited source, such a measure was necessary because in the absence of a real financial filter, some market participants contract large amounts of energy without the genuine intention of purchasing, do not provide payment guarantees, and then resell before delivery only seeking gain from price differences.

'The result? Market imbalances, unstable prices, distrust between participants,' ANRE representatives said.

Other important provisions of the mechanism adopted by ANRE are intended to clarify the fact that the contractual price can no longer be modified subsequently, depending on variations in transmission tariffs - 'a practice that caused uncertainty and inequity'. Also, the minimum number of eligible partners required on the continuous double-auction market is lowered from 8 to 4, in order to facilitate access to firm transactions and increase market liquidity. AGERPRES (RO - writing by: Mariana Nica; EN - writing by: Simona Klodnischi)